Gillespe & Ngan
[2023] FedCFamC1A 27
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Gillespe & Ngan [2023] FedCFamC1A 27
Appeal from: Gillespe & Ngan [2022] FedCFamC2F 1303 Appeal number: NAA 241 of 2022 File number: MLC 10870 of 2021 Judgment of: AUSTIN J Date of judgment: 20 March 2023 Catchwords: FAMILY LAW – APPEAL – De facto relationship – Where the primary judge made orders declaring that a de facto relationship did not exist between the parties – Alleged errors of fact – Where the appellant’s submission that he had an equitable interest in a parcel of real property was not one made to the primary judge and cannot now be made in the appeal – Where the findings of the primary judge that the parties did not intermingle their finances is consistent with the appellant’s evidence – Whether the decision is plainly wrong – Where findings of de facto relationships are factual not discretionary – Where the finding was not foreclosed by the evidence – Appeal dismissed – Costs ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) Pt VIIIAB, ss 4AA, 44, 90RD
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Cases cited: Allen v Snyder (1977) 2 NSWLR 685
Black Uhlans Inc v NSW Crime Commission [2002] NSWSC 1060
Bosanac v Commissioner of Taxation (2022) 405 ALR 424; [2022] HCA 34
Calverly v Green (1984) 155 CLR 242; [1984] HCA 81
Colburn & Cleese (2022) FLC 94-105; [2022] FedCFamC1A 147
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
O’Brien v Komesaroff (1982) 150 CLR 310; [1982] HCA 33
Russell v Scott (1936) 55 CLR 440; [1936] HCA 34
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35
Water Board v Moustakas (1988) 180 CLR 491; [1998] HCA 12
West v Mead [2003] NSWSC 161
Number of paragraphs: 33 Date of hearing: 20 March 2023 Place: Newcastle (via video link) Counsel for the Appellant: Mr Howe Solicitor for the Appellant: Hartleys Lawyers Counsel for the First Respondent: Dr Matta Solicitor for the First Respondent: Pearce Webster Dugdales The Second Respondent: Did not participate in the appeal ORDERS
NAA 241 of 2022
MLC 10870 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR GILLESPE
Appellant
AND: MS NGAN
First Respondent
MS A NGAN
Second Respondent
order made by:
AUSTIN J
DATE OF ORDER:
21 March 2023
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The appellant shall pay the first respondent’s costs of and incidental to the appeal in the fixed sum of $7,500.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Gillespe & Ngan has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENTAUSTIN J:
This is an appeal from the judgment pronounced by a judge of the Federal Circuit and Family Court of Australia (Division 2) on 30 September 2022, in so far as it was relevantly reflected in a declaration and an order made in these terms:
THE COURT DECLARES THAT:
1.Pursuant to s 90RD of the Family Law Act 1975 (Cth), [the appellant] and the first respondent were never in a de facto relationship.
THE COURT ORDERS THAT:
2. [The appellant’s] amended application filed on 13 July 2022 be dismissed.
The appeal should be dismissed for the following reasons.
Background
In October 2021, the appellant commenced proceedings against the first respondent seeking declaratory and property settlement relief under Pt VIIIAB of the Family Law Act 1975 (Cth) (“the Act”), which he alleged was warranted following the termination of their de facto relationship of about seven years duration in May 2021.
The first respondent denied there had ever been a de facto relationship between them.
The second respondent is the first respondent’s sister. It remains quite unclear why she was joined as a party to the proceedings because the appellant did not make any claim for relief against her. She was also pointlessly joined by the appellant to the appeal, but she elected to take no part in it.
The proceedings were listed for hearing before the primary judge in August 2022, but only to determine threshold jurisdictional issues joined by the parties. The live issues were, first, whether there had been a de facto relationship between the appellant and the first respondent and if so, secondly, when it began, and thirdly, when it ended. The duration and timing of the termination of the de facto relationship, if it ever existed, would establish whether jurisdiction existed to entertain the dispute and whether any allied application would need to be made under s 44(5) of the Act for leave to bring the property settlement application out of time.
The primary judge was satisfied the appellant was a reliable witness (at [26]), but his personal impression about the nature of the parties’ relationship was not dispositive of its objective characterisation. Correctly, the primary judge recorded how the appellant bore the burden of proving the existence and duration of the de facto relationship on the balance of probabilities (at [72]).
The primary judge adverted to the criteria prescribed by s 4AA of the Act and concluded no de facto relationship had ever existed between the parties, which finding was expressed this way:
111.Having considered all of the circumstances and having regard to the quality of the evidence before the Court, I am not satisfied that the parties at any time were in a de facto relationship for the purpose of s 4AA of the Act.
112.While it is undoubtedly the case that the parties had genuine affection for one another and that the [appellant] provided substantial financial support to the [appellant] (sic) at different times throughout their relationship, the composite picture that emerged was not one that involved the merger of the parties’ lives.
The ensuing declaration under s 90RD(1) of the Act – that no de facto relationship had existed between the appellant and first respondent - meant the Court was deprived of jurisdiction to entertain the ancillary claim for property settlement relief, in which case it had to be dismissed. Correctly, the primary judge said this:
114.Having regard to my finding about the character of the parties’ relationship, it is incumbent on me to dismiss the [appellant’s] application. The question of leave to make an application under s 90SM does not arise in circumstances where the [appellant] is unable to satisfy one of the pre-conditions to the making of a property adjustment order under Part VIIIAB of the Act.
The Appeal
The three grounds of appeal are pleaded as follows:
1.That Her Honour erred in fact in determining that the Appellant and First Respondent did not own property together.
2.That Her Honour erred in fact in determining that the Appellant and First Respondent did not intermingle their finances.
3.That Her Honour erred in fact in determining that pursuant to s 90RD of the Family Law Act, 1975 (Cth) the Appellant and Respondent were never in a de facto relationship.
(Emphasis added)
As can be seen, the first two grounds assert material factual mistakes in the findings which were made with respect to ss 4AA(2)(d) and 4AA(2)(e) of the Act.
The third ground of appeal adds nothing to the first two grounds and is incompetent in isolation.
Ground 1
This ground alleges the primary judge erred by finding the parties did not own property together, that being a relevant consideration under s 4AA(2)(e) of the Act.
The relevant findings made by her Honour were expressed thus:
102.It is undisputed that the parties did not own any real property together, nor did they acquire any joint property during the period of their relationship. However, as noted above, the [appellant] did make a financial contribution to the purchase of the Suburb B property and made weekly payments to the first respondent, in amounts of either $500 or $1,000, which amounts were then appropriated for payment of the mortgage over the property.
103.Although [the appellant] gave evidence that the purchase of the Suburb B property signalled that the parties’ relationship had entered a new (more committed) stage and that the purchase was one made together, the evidence (limited as it was) about the purpose for the purchase of this property was equivocal. What is not in dispute however is that despite there being some suggestion that the property was purchased as an investment for [the appellant], it was the first respondent who controlled the purchase, it was the first respondent who benefited from the use and enjoyment of the property as her principal residence and when the Suburb B property was sold in 2018, the [appellant] was paid out of the sale proceeds an amount that closely approximated his contributions to its purchase and mortgage repayments.
However, the appellant now asserts he and the first respondent owned the Suburb B property together. His submission in that regard in the appeal was expressed this way:
2.It is submitted that the evidence clearly shows that the Appellant had an equitable interest in the Suburb B property by way of resulting trust.
3.The Appellant paid $40,000 towards the deposit for the property and thereafter paid a sum of approximately $107,850 by way of payments towards the mortgage.
4.It is submitted that the payments in 3 above created an equitable interest by way of resulting trust in the [Suburb B] property. …
(Appellant’s Summary of Argument filed 3 February 2023) (Footnote omitted)
The submission of the appellant’s equitable interest in the Suburb B property was not a submission he made at first instance. Before the primary judge, the appellant only sought to quantify the financial contributions he made at the time the Suburb B property was purchased and during the period of its ownership. The suggestion of his acquisition of an equitable interest in the property was never mentioned, either orally or in writing.
Although the submission now made about the equitable interest is of a legal rather than factual character, it could have been met by a more detailed evidentiary contest before the primary judge. The appellant might have been cross-examined on the issue and admissions elicited from him which would impede his substantiation of the submission. The first respondent might also have adduced more evidence about the circumstances under which she received, applied and repaid the money advanced to her by the appellant. The submission is not one which the appellant can now fairly raise in the appeal (Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; O’Brien v Komesaroff (1982) 150 CLR 310 at 319; Metwally v University of Wollongong (1985) 60 ALR 68 at 71; Coulton v Holcombe (1986) 162 CLR 1 at 7–8; Water Board v Moustakas (1988) 180 CLR 491 at 497).
In any event, the submission is flawed. Even on the evidence adduced by the appellant, the circumstances in which he advanced the money to the first respondent were equivocal. He conceded the first respondent alone handled the purchase of the Suburb B property in 2014, she executed the purchase contract alone, and she thereafter lived in the property alone. He loaned the first respondent $40,000 at about the time of the purchase, but he does not know what she did with the money. Over the next four years he regularly paid variable weekly amounts to the first respondent, which she used as she saw fit. When the first respondent sold the Suburb B property in 2018, she repaid the appellant $150,000, which sum approximated the money advanced by him and was not apparently representative of any proportional share of the sale price.
The primary judge was not asked to find the appellant had an equitable interest in the Suburb B property, so no finding was made either for or against the proposition. The relevant enquiry under s 4AA(2)(e) of the Act concerned the “ownership, use and acquisition” of property. Her Honour accepted the appellant’s evidence about the payments he made to the first respondent to enable her acquisition and retention of the Suburb B property, but acceptance of evidence about those facts should not be confused with acceptance of a legal proposition about the appellant’s acquisition of equitable interest in the Suburb B property.
An implied (or resulting) trust arises where the legal owner of property provides only part of the purchase price and another party provides the other portion of the purchase price. A trust is presumed in favour of the other party and his beneficial interest is proportionate to the financial contribution, because it is presumed that was the intention (Bosanac v Commissioner of Taxation (2022) 405 ALR 424 at [8], [12]–[22], [51]–[53] and [64]–[67]; Calverly v Green (1984) 155 CLR 242 at 246; Black Uhlans Inc v NSW Crimes Commission [2002] NSWSC 1060 at [133]–[136]; Allen v Snyder (1977) 2 NSWLR 685 at 689–691; Russell v Scott (1936) 55 CLR 440 at 451). The trust may also be implied from later financial contributions, such as those in the nature of mortgage repayments, but that is not usually so (Black Uhlans Inc v NSW Crime Commission at [141]–[142]; West v Mead [2003] NSWSC 161 at [60]).
Here, the appellant simply gave the first respondent money. He did not and could not know if or how the money was specifically applied by her to the purchase of the Suburb B property or to the maintenance of the mortgage secured over it. The appellant’s repayment of the money he advanced to the first respondent tends to strongly imply a loan arrangement rather than a mutual presumption of his acquisition of an equitable proprietary interest in the Suburb B property. The factual conclusion reached by the primary judge was consistent with the available evidence. There was no factual mistake. Ground 1 fails.
Ground 2
This ground alleges the primary judge erred by finding the parties did not intermingle their finances, that being a relevant consideration under s 4AA(2)(d) of the Act.
The relevant findings made by her Honour were expressed thus:
15.[The appellant] agreed with the following propositions put to him by the first respondent’s counsel.
…
18.Third, that [the appellant] has never been financially dependent on either the first respondent or her sister (the second respondent).
19.Fourth, that there had been no “intermingling” of finances by the parties. In particular, the parties had never maintained a joint bank account, or owned joint property and the [appellant] had never been an additional card holder to an account operated by the first respondent, and vice versa.
20.Fifth, that the loans made by [the appellant] to the first respondent in January and March 2014 had both been repaid.
…
100.[The appellant] acknowledged that he had never been financially dependent on the first respondent and that there had been no “intermingling” of finances by the parties. In particular, the parties had never maintained a joint bank account, or owned joint property and [the appellant] had never been an additional card holder to an account operated by the first respondent, and vice versa. However, [the appellant] contended that the first respondent was financially dependent upon him. Although [the appellant] provided a non-committal response to why he said this was the case in cross-examination, I understood him to place some significance upon his unchallenged evidence that he contributed the amount of $157,850 to the purchase of the Suburb B property, and that he extended loans to the first respondent, throughout the parties’ relationship, to allow the first respondent to purchase certain items for her [business]. [The appellant’s] unchallenged evidence, which I accept – including because I have drawn an inference that the first respondent’s evidence on the topic would not have assisted her – was that the last funds extended to the first respondent (an amount of approximately $34,000) have not been repaid.
101.I am prepared to accept that by requesting that [the appellant] advance her funds and by accepting the provision of same (in 2014 and again between late 2018 and early 2020), the first respondent demonstrated a level of financial dependency on [the appellant]. Although the payments made by [the appellant] to the first respondent were in the nature of loans, some of which have been repaid, they were also financial contributions and were timely and supportive in the sense that they enabled the first respondent to continue her business activities. Although the funds were not directed at a common enterprise (the [business] appears to have been uniquely the concern of the first respondent), I accept that from [the appellant’s] point of view at least, he provided the [appellant] (sic) with this funding because he believed the parties were building a life together.
Those findings are consistent with both the appellant’s evidence-in-chief and oral evidence. During cross-examination, the appellant made this concession:
[COUNSEL FOR THE FIRST RESPONDENT]: So other than the loans and the Suburb B property, the two of you never intermingled your finances?
[THE APPELLANT]: No.
[COUNSEL FOR THE FIRST RESPONDENT]: You were never inter-dependent on each other?
[THE APPELLANT]:No.
[COUNSEL FOR THE FIRST RESPONDENT]: You never had a joint bank account?
[THE APPELLANT]:No.
(Transcript 22 August 2022, p.27 lines 29–34)
Then, during re-examination, the appellant said this:
[COUNSEL FOR THE APPELLANT]: Was there any other intermingling of finances?
[THE APPELLANT]: No
(Transcript 22 August 2022, p.33 line 26)
In the appeal, the appellant curiously submitted that his own admission about the lack of any intermingling of finances should be given no weight, contending this:
9.It is submitted that the Appellant’s agreement with the proposition put to him that he and the 1st Respondent did not intermingle their finances should be given no weight in the context of the uncontested evidence outlined in paragraph 8 above.
(Appellant’s Summary of Argument filed 3 February 2023)
The “uncontested evidence” to which the appellant was referring was his grant of various loans to the first respondent, most but not all of which were repaid (at [100]). But such commercial arrangements between the parties are not easily passed off as an intermingling of their personal financial affairs. Rather, the loans and repayments wear the appearance of the parties keeping their financial affairs separate and at arms-length, which is the finding made by the primary judge. The appellant’s other payments to the second respondent for the utilities which he used at another real property they jointly occupied had no apparent connection to the nature of his relationship with the first respondent.
The primary judge’s findings are not shown to be mistaken, in which case Ground 2 also fails.
Ground 3
Although this ground of appeal asserts a mistake of fact, it was argued in support of the ground that the finding (and hence the consequential declaration) of there being no de facto relationship between the parties was “plainly wrong”, evoking the familiar language of the particular ground of appeal which lies from a discretionary decision on the basis that, even though no frank appealable error can be identified, the result is so incongruent with the evidence and applicable legal principles that an appealable error must be inferred (Norbis v Norbis (1986) 161 CLR 513 at 539–540). But that discretionary principle has no application here.
Decisions made about the existence and length of de facto relationships are factual, not discretionary (Colburn & Cleese (2022) FLC 94-105 at [47]). The primary judge correctly acknowledged an evaluative factual decision was required (at [77(a)]). The determination by the primary judge of there being no de facto relationship between the parties was either foreclosed by the evidence or it was not. It was not. This ground fails.
Disposition
The appeal is dismissed.
The first respondent sought scale costs of $10,536.70 upon dismissal of the appeal. The appeal was wholly unsuccessful and the appellant did not resist the application on account of his financial circumstances, so a costs order is appropriate.
However, that is not to say the costs should be awarded in the sum sought. The grounds of appeal were few and without merit. The appeal could have been resisted with less expense. The first respondent conceded that her costs, if properly calculated on a party/party basis at scale, would approximate $9,000. The appellant’s party/party scale costs were only $7,736.10. Pursuant to r 12.17(1)(a) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), the first respondent’s costs are fixed at $7,500.
I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Austin. Associate:
Dated: 24 March 2023
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